iZettle to Launch in U.K.

iZettle, a service that allows anyone with an iPhone to accept credit or debit card payments, is to launch into the U.K. Wednesday, the first country outside of the Nordic region.

CEO Jacob de Geer said the service will be in private beta with 3,000 merchants and will accept MasterCard, American Express and Diners Club cards. Mr. de Geer said they were in talks with Visa.

The service comprises a card reader that plugs into an iOS device and an app that runs on an iPhone or iPad that allows a customer to sign for the goods. Part of the U.K. trial, said Mr. de Geer, is to test user’s acceptance of signing for goods in a country that has shifted to Chip and PIN transactions.

Unlike traditional point of sale card readers, there is no set up fee, or monthly payment. Instead, iZettle owners pay a fee of 2.75% per transaction.

iZettle is EMV (Europay, MasterCard and Visa) approved, and compliant with PCI-DSS (Payment Card Industry Data Security Standard). No sensitive data is stored on the mobile device or iZettle reader, and all data traffic is encrypted.

Mr. de Geer said the device was complimentary to the existing payment systems. “It brings a lot more merchants into the scheme,” he said. “These are merchants who are too small to use the existing terminals. It is not profitable to go after them.” He said that the cost of customer acquisition for an iZettle customer is about €30.

The ideal use case, he said, was a merchant or tradesperson doing only a few transactions a day, and provided an alternative to cash, cheques or invoices. It was not designed to be a replacement for existing POS devices in shops he said.

In an emailed statement, Marion King, President of MasterCard UK & Ireland, said: “We’ve been supporting iZettle since its inception in Sweden and believe the pilot in the U.K. is another important step towards enabling commerce, by offering cardholders and micro-merchants the choice to make and receive payments in an innovative new way.”

With more than 50,000 users today, iZettle has increased the number of point of sale (POS) card acceptance terminals in the Nordic by 10 percent since it began operation in Sweden last September and expanded to Denmark, Finland and Norway in February this year.

The U.K. has 1.2 million POS devices, and an estimated 15 million iOS devices.

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